The study obtains measures of the productive efficiency of 'larger' and 'smaller' Northern Ireland hospitals during the 1986-92 pre-Trust period. The measures provide insights into how these hospitals were responding to the pressures for increased efficiency prior to Trust status. They also constitute a useful benchmark for evaluating productivity change under the post-1992 Trust status environment. A nonparametric frontier approach is used to measure productivity change and to decompose this into technical change (or shifts in the best practice frontier) and efficiency change (or change in how far a hospital is from the frontier). The latter change in efficiency is also decomposed into changes in scale efficiency, pure technical efficiency and input congestion. The findings indicate that smaller hospitals, starting from a less efficient base, achieved greater productivity gains than larger hospitals over 1986-92. For smaller hospitals, this was due to progressive shifts in the best practice frontier outweighing a substantial decline in efficiency. This decline was found to be due to a deterioration in scale efficiency over the period. The results overall support the current policy view that larger hospitals are more efficient than smaller hospitals in providing health care services.

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Planning health and social services for client groups has become an integral part of the planning process within the United Kingdom. The Department of Health's microcomputer model--Balance of Care--attempts to analyse different policies for the care of the elderly and to assess the consequences of such policies in terms of the resources required. This paper shows how the model operates using data from a survey of elderly people in Northern Ireland. An attempt is also made to introduce economic principles into the decision making process. Attention is drawn to the economist's definition of costs and how this can differ from the public expenditure concept of costs. A further area of interest is the process of allocating people to specific types of care. The economic approach points to the need to make explicit valuations of the benefits of various services against a background of costs. Within this context, the Balance of Care model can be used to consider various scenarios and as such is a useful tool in the decision making process.